About 282 million shares (20 percent) will be sold to strategic partners. Another 48.8 million shares (3.5 percent) will be sold to the public while the remainder will be sold to the company's employees.

Truong said the permission for Vietnam Airlines to keep $148 million in capital surplus is necessary for the carrier to expand its fleet given the air travel market's fierce competition.

As of late last year, Vietnam Airlines accounted for 63 percent of the seats on domestic flights, compared to 25 percent for start-up VietJet Air and 12 percent for Jetstar Pacific, according to the CAPA-Center for Aviation, an aerospace consulting firm.